WTO: Harbinson Circulates 'Overview Paper', EU Presents New AG Proposal

20 December 2002

On 18 December, Stuart Harbinson, chair of the negotiating session of the Committee on Agriculture (CoA), circulated a long-awaited 'overview paper' that outlines the current status of negotiations on establishing numeric targets, formulas and other 'modalities' for countries’ commitments by 31 March 2003. The paper was released in accordance with the agreed timeline. In his general observations, included in the 89- page compendium, Harbinson pointed to "substantial progress" on some issues such as tariff quota administration and export credits. He however went on to list six key points relating to outstanding issues, including: significant differences in interpreting the Doha mandate; developing countries' split on special and differential treatment (S&D); and the role of non-trade-concerns (NTCs). The 'overview paper' was released only two days after the EU submitted its modalities proposal for the agriculture negotiations (see below).

Major "flexibilities on all sides" said to be imperative

The 'overview paper' contains a 12-page narrative section that includes the Chair's comments and a summary of the main negotiation issues in the three areas of market access, export competition and domestic support. In addition, Harbinson added a section on least-developed countries (LDCs), which states that there is "significant support" among Members for excluding LDCs from any reduction commitments in the three areas. The 'overview paper' also includes a 77-page annex listing options Members have suggested for addressing the many modalities parameters.

"This paper should signal the start of a new phase in the negotiations" where participants "need to move beyond the restatement of well-know national positions," Chair Harbinson pointed out to Members. Moreover, he urged countries to immediately focus on the many outstanding issues and questions highlighted in the paper, "not simply…identifying the option which corresponds to their position but to think creatively about avenues for convergence." Apparently in an effort to push Members to start striking real deals on the various issues, he reminded trading partners that agreeing on the modalities would not mark the end of the agriculture negotiations and that "there will be time thereafter to address matters not directly required for the purpose of establishing draft schedules of further commitments." Above all, Harbinson stressed, "the ground rule will continue to be that nothing is agreed until everything is agreed," not least because of the interlinkages between the three negotiation pillars relating to market access, export competition and domestic support themselves, and with the negotiations under the Doha Development Agenda as a whole.

New EU proposal draft dismissed by Cairns, US

The EU's key trading partners had been putting noticeable pressure for some time on the EC to provide its modalities proposal setting out clear numbers and targets for the current phase of the agriculture negotiations. The Commission introduced its new negotiating position to EU Members States only two days ahead of the release of Harbinson’s 'overview paper'. Due to its late release, the paper was neither adopted by EU Member States at the 16-19 December EU Agriculture Council nor included in Harbinson's paper.

The key elements of the Commission paper are proposals to: slash WTO Members' import tariffs by 36 percent; reduce Amber Box subsidies (i.e. trade distorting support) by 55 percent; and cut export subsidies by 45 percent, eventually eliminating export subsidies on products such as wheat, oilseeds, olive oil and tobacco. The proposal also contains certain measures to benefit developing country Members. These include providing full market access to imports from least-developing countries (LDCs) and richer countries providing zero duty market access to at least 50 percent of their imports from developing countries. The proposal also contains a "food security box" including a special agricultural safeguard and additional flexibilities granted to developing countries to pursue food security and rural development objectives. Moreover, the Commission reiterated its previous suggestions to address contentious issues such as food labelling, the precautionary principle, animal welfare and the extension of geographical indications (GI) directly through the agriculture negotiations (see BRIDGES Weekly, 25 September 2002).

In its preliminary comments, the 17-member Cairns Group of agriculture exporting nations criticised the European proposal for contravening the Doha mandate which called for the "reductions of, with a view to phasing out" all forms of export subsidies. The group also stated that the proposal fails to make a suggestion on how to dismantle the so- called Blue Box covering partly decoupled government payments under production-limiting programmes. Australian Trade Minister Mark Vaile remarked that the Commission's tariff reduction proposal provides "too little and too late". The US was quick to lash out at the Commission position. AUS government official stated that "you would hope that our European friends would match the ambition of the US proposal." (BRIDGES Weekly, 6 August 2002). "At least in an initial impression, it does not do that," he added.

A Latin American Cairns official particularly criticised the proposal to eliminate export subsidies on certain products of export interest to developing countries. "What they are trying to do is pit developing country exporters of wheat and oilseeds against exporters of sugar, dairy and beef," he said. The latter three sectors were also the main recipients of EU export refunds and had influential lobby groups trying to retain this support, he added. As regards the EU proposal that developed countries should ensure "zero duty access for developing countries' exports of agricultural products on no less than 50 percent of their imports from developing countries," trade experts cautioned that one needed to ask for more detail on this to be in a position to evaluate whether this EU offer would really be to the benefit of all developing countries or only to some. Nevertheless, a Cairns representative indicated that the EU's proposal on Amber Box subsidy cuts was "more than we expected".

EU Members still to discuss Commission paper

According to observers in Brussels, the Commission's proposal has generally been received positively by EU Members States. Noting that certain minor amendments in the various individual proposals could be expected, it was felt that the Commission's position would be adopted by EU Members States in all of its substantive elements prior to the forthcoming negotiating session of the WTO CoA in late January.

The WTO overview paper can be viewed at: http://www.wto.org/english/tratop_e/agric_e/negoti_modoverview_e.htm.

The recent EU press release on the new Commission paper is posted at http://europa.eu.int/rapid/start/cgi/guesten.ksh? p_action.gettxt=gt&doc=IP/02/1892|0|RAPID&lg=EN&display=.

EU Director-General for Agriculture Franz Fischler's speech at a 16 December press conference can be viewed at http://europa.eu.int/comm/agriculture/external/wto/index_en.htm.

ICTSD reporting; "Agriculture: Cairns Group Countries Blast European Union's Agriculture Proposal," WTO REPORTER, 19 December 2002; "Australia Dismisses EU Farm Proposal," AFP, 18 December 2002; "EU Fails To Impress With 'Tepid' Trade Subsidy Reforms," DOW JONES, 17 December 2002; "WTO And Agriculture: European Commission Proposes More Market Opening, Less Trade Distorting Support And A Radically Better Deal For Developing Countries," EU PRESS RELEASE, 16 December 2002.  

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